Depth report

　　

Strategic cooperation turned losses into profits

About a 40-minute drive southwest of Kuala Lumpur, a sleek, sleek building with a dynamic design is the headquarters of Proton Motors. Entering the hall, a purple-red car was lying in the center of the booth. "This is Proton's first model, the Saika, which was launched in 1985." Khairul Nizar, a research and development engineer who has worked at Proton for more than 30 years, proudly said, "When the affordable and reliable Sejia was launched, it set off a car buying boom in Malaysia, and it can be seen everywhere in the streets."

According to statistics, at the peak of Proton, the annual output of nearly 200,000 vehicles, the local market share was as high as 60%, is Malaysia's well-deserved "national car". However, after 2010, due to the level of research and development and manufacturing, Proton fell into trouble and suffered losses for years. In 2016, Proton produced only about 70,000 units a year.

In an effort to turn things around, Proton has received responses from 15 of 23 global automakers, including Geely, after inviting them to cooperate.

At the time, Geely headquarters had also debated whether to cooperate with Proton. As a national brand in Malaysia, Proton does not want to lose control. Without a controlling stake, how can Geely guarantee the development direction of the enterprise? How to cover the annual loss of more than 1 billion ringgit (1 yuan about 0.62 ringgit)? How can cultural differences be bridged? ... Geely Chairman Li Shufu is very firm: Chinese cars to go to sea is a general trend, as long as the general direction is correct, do it!

In June 2017, the two parties signed an agreement for Geely to acquire a 49.9% stake in Proton, fully taking over the management of Proton, while ensuring that its national brand status remains unchanged.

In December 2018, the Proton X70, developed on the basis of Geely Boyue, was officially launched, and a year later, localization assembly was completed at the Proton Tanjung Malim plant. Chinese supplier Egatong customized and developed an intelligent network connection system for this model to realize intelligent interaction between people and vehicles. "By simply saying 'Hi Proton,' the voice assistant can be easily awakened for various operations such as navigation and entertainment, greatly enhancing the driving experience." Proton's head of research and development, Hazan Ghazari, said that this highlight made the X70 quickly become a market darling, with enthusiasts affectionately calling it the "talking car".

"At the end of 2019, the company's revenue turned around to profit, and everyone took a reassurance." Khairul Nizar said.

Flexible management rigid reform

"Cooperation between companies is ultimately cooperation between people." This sentence of Li Shufu illustrates a difficult point in corporate mergers and acquisitions. There are cultural differences between China and Malaysia, and the corporate cultures of Geely and Proton are also different. How to unite employees with different backgrounds and show their strengths? Through the "Global Corporate Culture Research Center", Geely has conducted in-depth research on local culture and carried out targeted flexible management work in combination with Proton's actual situation.

As the first Chinese CEO of Proton, Li Chunrong, in his first letter to all employees, promoted a corporate culture of respect, inclusion and integration. On every important occasion, he wears traditional Malay costumes and interacts with employees.

"We were very moved by the details. The sincerity and pragmatism of our Chinese partners make us confident that Proton's future will be even brighter." "Recalls Desmond Pinto, Proton's car programme director.

Fully respect the corporate culture, solid research on the local market, in-depth analysis of difficult points...... Li Chunrong and his team have overhauled Proton's management and marketing systems. The original Proton sales and after-sales network is mainly composed of special repair shops. The Geely team put forward higher requirements for the hardware facilities and service level of dealers, and vigorously developed and promoted automobile 3S and 4S stores. Today, Proton has an extensive dealer network in Malaysia with a total of 157 3S and 4S stores. Proton's total car sales exceeded 150,000 units for two consecutive years, and dealer satisfaction with sales and service also increased significantly.

After seven years of deep integration, Proton Motor has completed a comprehensive transformation in research and development, manufacturing, quality, procurement and marketing, and has been ranked second in the Malaysian market in terms of sales and market share for six consecutive years. As Sai Faisha, managing director of Proton's parent company Duoyuan Heavy Industries Group, said, the cooperation between Geely and Proton has brought a leap forward.

Transformation and upgrading for common development

About 85km north of Kuala Lumpur, the new Tanjung Malim Automotive High-tech Valley in Malaysia is rapidly emerging from the traditional manufacturing base of Proton Motors. In 2023, Geely and Duoyuan Heavy Industry Group reached a strategic cooperation to jointly build this region into an ASEAN research and development and manufacturing center for new energy vehicles and advanced technologies, and promote the transformation and upgrading of Malaysia's automotive industry to intelligence and electrization.

"It was seeing the huge potential of the Automotive High-tech Valley and the vast development space that Proton offers to young people that I decided to join." When Aimel, assistant project manager of Proton X70 model, graduated, he received several offers from companies, but he finally chose Proton. In the first year, the company provided him with rich job rotation opportunities to accumulate experience in four core departments, including sales and research and development. "Last year, I also went to China to participate in a one-week training and benefited a lot. The company provides us with more than 40 hours of professional training each year to help us continuously improve our business." "Aimel said.

Aimal is a beneficiary of the Proton Youth Talent Development Programme. Since its launch in 2018, the program has recruited more than 100 outstanding graduates every year to train more high-quality talents for the company through job rotation training and selection. At present, nearly 200 young talents have joined Proton through the programme.

Tanjung Malim Automotive High-tech Valley not only comprehensively reshapes the talent industry chain, but also strives to build a smart industrial park integrating vehicle production and parts supply. Yusri Yusef, Proton's senior director of corporate strategy, told reporters that by 2035, the annual vehicle capacity of the Automotive High-tech Valley will reach 500,000 units, half of which will be exported overseas. The park will also establish a supply chain system with an annual output of 1 million spare parts to serve the global market.

China's automotive technology has also brought great opportunities for local suppliers in the automotive high-tech Valley. With the technical support of China's Ningbo Topu Company, PHN, a Malaysian auto parts company, overcame the quality bottleneck and produced bumpers and other spare parts through Proton's high standard assessment in 2023, promoting the proportion of Proton's local spare parts increased by 8%.

Minister of Investment, Trade and Industry Zaful said the automotive industry is one of the five pillar industries in Malaysia and provides employment opportunities for about 700,000 people. The beautiful "marriage" between Geely and Proton not only injected new impetus into the Malaysian automotive industry, but also set a model for the economic and trade cooperation between Malaysia and China.